The Covid pandemic and an unprecedented shortage of semiconductors has put risk management at the forefront of supply chain concerns. Recent history has only reinforced the notion that a costly, disruptive event can remain unnoticed in the supply chain until it’s too late.
Most recently, per- and polyfluoroalkyl substances (PFAS) have raised risk levels in electronics. It’s not just that these widely used chemicals are pollutants, explained Bindiya Vakil, CEO of risk management firm Resilinc. Litigation around PFAS use has skyrocketed to the point where their biggest supplier, 3M, is exiting the market by 2025.
A significant portion of that litigation is around damage to health, the environment, and companies that believed they were PFAS-free. “Companies who don’t even know where PFAS are in their supply chain are taking a huge risk,” said Vakil. “We’ve seen an increase in litigation taken against companies — compliance, legal actions, fines, labor violations – become more and more prevalent. We’ve seen almost a 70 percent increase between 2021 to 2022 on just legal actions related to human rights violations.”